Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
JUNE 20, 2018
Subject
SUBJECT: PROPOSITION A AND PROPOSITION C LOCAL
RETURN CAPITAL RESERVES
Action
ACTION: APPROVE RECOMMENDATIONS
Heading
RECOMMENDATION
Title
CONSIDER:
A. ESTABLISHING Proposition A and Proposition C Local Return funded Capital Reserve Account(s) for the Cities of Covina, Hidden Hills, La Mirada, Lawndale, San Dimas, Santa Monica, and Signal Hill, as described in Attachment A;
B. APPROVING four year extension of Proposition A and Proposition C Local Return Capital Reserve Account(s) for the Cities of El Monte, Lomita, and Redondo Beach, as described in Attachment A;
C. AUTHORIZING the Chief Executive Officer to negotiate and execute all necessary agreements between the Los Angeles County Metropolitan Transportation Authority (LACMTA) and the Cities in Attachment A for their Capital Reserve Accounts as approved.
Issue
ISSUE
A local jurisdiction that needs additional time to accumulate sufficient funding to implement a project may be at risk of lapsing of funds. To avoid lapsing, a local jurisdiction may request that funding be dedicated in a Capital Reserve Account. Upon Board approval, as required for Local Return Funds, a local jurisdiction may be allowed additional years to accumulate and expend its Local Return funds from the date that the funds are originally made available.
Discussion
DISCUSSION
Proposition A and Proposition C Local Return Guidelines require that Local Return funds be expended before a four-year lapsing deadline (the year of allocation plus three years). However, Capital Reserve Accounts are permitted under the Local Return Guidelines, with approval from the Board of Directors. Capital Reserve accounts may be established so that Los Angeles County local jurisdictions may extend the life of their Local Return revenue to accommodate longer term financial and planning commitments for specific capital projects.
Some of the Proposition A and Proposition C Local Return funds could lapse due to time constraints. According to the Local Return Guidelines, the lapsed funds then would be returned to LACMTA so that the Board may redistribute the funds for reallocation to Jurisdictions for discretionary programs of county-wide significance, or redistribute to each Los Angeles County local jurisdiction by formula on a per capita basis.
Determination_Of_Safety_Impact
DETERMINATION OF SAFETY IMPACT
Approval of the cities requests will allow for improvements to the streets and roads, intersections, signal synchronization, transit center, and city wide bus stops as listed on Attachment A.
Financial_Impact
FINANCIAL IMPACT
The adoption of staff recommendation would have no impact on the LACMTA Budget or LACMTA’s Financial Statements. The Capital Reserve Account funds originate from the portion of Proposition A and Proposition C funds that are allocated to each Local Angeles County local jurisdiction by formula.
Alternatives_Considered
ALTERNATIVES CONSIDERED
The Board could choose not to approve staff recommendations. Staff does not recommend this alternative as the Cities may not be able to accumulate sufficient funds necessary for their large capital projects as described in Attachment A. The cities often have no other funds and these local projects could otherwise be unable to proceed to construction in a timely manner.
Next_Steps
NEXT STEPS
Upon Board approval, staff will negotiate and execute all necessary agreements between LACMTA and the listed cities for their Capital Reserve Accounts as approved. We will monitor the accounts to ensure that the cities comply with the Local Return Guidelines and the terms of the agreements.
Attachments
ATTACHMENTS
Attachment A - Project Summary for Proposed or Amended Capital Reserve Accounts
Prepared_by
Prepared by: Susan Richan, Senior Manager, Transportation Planning, (213) 922-3017
Drew Phillips, Director, Budget, (213) 922-2109
Reviewed_By
Reviewed by: Nalini Ahuja, Chief Financial Officer, (213) 922-3088
